Siemens Earnings: Short-Term Automation Weakness Should Not Detract From Group's Solid Outlook
Short-term market weakness within wide-moat Siemens’ digital industries segment should not overshadow the group’s long-term prospects, where the group is a beneficiary of several long-term growth themes. Second-quarter fiscal 2024 organic revenue was flat year over year, underperforming peers ABB and Schneider Electric due to its larger weighting to an industrial automation sector in cyclical decline. Full-year guidance was adjusted on a segmental level, but has no impact on the group level. Siemens confirmed full-year organic revenue growth guidance of between 4% and 8%, which we view as attainable and broadly in line with its capital goods peers, highlighting that its prospects remain robust. We maintain our EUR 180 fair value estimate and view shares as fairly valued.